Following the money trail: Off-highway vehicle riders produce billions in annual revenue for cities, counties, states

April 05, 2016

Communities across America are reaping economic rewards from both new and long-established trail systems—directly, through purchases of motorcycles, ATVs, fuel, food and gear, and indirectly, by means of a “ripple effect” as off-highway vehicle riders' money is spent again and again throughout local economies.

The following was featured in the April 2014 competition edition of American Motorcyclist...

By Jim WittersPhotos courtesy of Hatfield-McCoy Trails

Communities across America are reaping economic rewards from both new and long-established trail systems—directly, through purchases of motorcycles, ATVs, fuel, food and gear, and indirectly, by means of a “ripple effect” as off-highway vehicle riders' money is spent again and again throughout local economies.

Here are the stories of five trail systems that show how public and private entities can work together to provide wholesome recreational opportunities as well as a local economic boost.

For Larry Lodato, the opening of two major trail systems for off-highway vehicles in Boone County, W.Va., has been a godsend.

Lodato, executive director of the Boone County Community and Economic Development Corp., is coping with a years-long slump in the coal-mining industry that has cost his state 17,000 jobs since 1983.

“I’m not saying tourism is going to be the savior, but these trails are going to help support the local economy during this coal slump,” Lodato says. “With the coal industry in decline, the landowners see the trails as a way to reuse the land.

“The trails have been a big economic boom here.”

The trails in Boone County are part of West Virginia’s Hatfield-McCoy Trails system, which provides more than 700 miles of trails over about a million acres of coal country.

In addition to providing outdoor recreational opportunities for tens of thousands of off-road enthusiasts, OHV trails have proved themselves to be viable economic engines, encouraging increased investment from entrepreneurs chasing those tourism dollars. That increased investment means more jobs, which pumps even more money back into the state’s economy.

Since the Hatfield-McCoy system opened 13 years ago, ridership and revenue have increased each year, says Jeff Lusk (pictured at right), who serves as executive director of Hatfield-McCoy Trails and is a member of the state’s tourism board.

The rural areas are benefitting.

During 2013, 81 percent of Hatfield-McCoy’s 36,000 off-highway-vehicle operators visited from out of state, spending money on lodging, food, fuel and parts.

Revenue and ridership were up about 16.5 percent for the year, Lusk says.

Since the trails system debuted, 44 new lodgings have sprung up to serve the influx of riders. Even that pace of construction is not enough, Lusk says.

“We need more lodging,” he says. “The construction of new facilities is not keeping up with rider growth. We need more entrepreneurs. Because of the rural nature of this land, it takes longer to get our legs under us. It could take two-and-a-half or three years to get the infrastructure in place and get some development. But once things are open, it has been a sustaining economic influence.”

Boone County is home to two trailheads—the Little Coal River Trail System, a family-friendly system that opened in 2002, and the Ivy Branch Trail System, which opened in November 2013 and is accessible to Jeeps, Hummers and other larger vehicles. It also has, near the Little Coal River system, a half-million-dollar welcome center on U.S. 119, along with the people to staff it.

In addition, parts stores and a powersports dealership have opened up nearby, Lodato says.

Boone County is expecting a third trail system to open in 2015 along the Big Coal River near Madison.

“I feel like we are primed for this to really take off,” Lodato said.

Clamoring For Access

The power of economic success is strong. Once the trails are open and the riders begin streaming in, even once-skeptical business and community leaders get on board, says Chris Gamache, chief of the New Hampshire Bureau Of Trails.

In June 2013, New Hampshire tied together its 1,000 miles of existing trails systems under the Ride the Wilds banner and began connecting the trails to nearby communities.

The response has been overwhelming.

“We saw a rapid increase in trail development and designation of gravel and some paved roads for OHRV use to connect to services and communities this past summer,” Gamache says. “We had several trail riding areas, but they were not connected together. This past summer those connections opened up rapidly and communities near the riding areas or the connection routes requested to be tied into the system for economic development.”

The town managers in several communities that tied into the trails system credited OHV riders for double-digit revenue increases at local businesses in August, Gamache says.

“Several local [off-highway recreational vehicle] dealers had record sales years, and rental agents had business increases much higher than anticipated,” he says.

Businesses that were not interested in being connected to the trails have seen what it has done for other businesses in their community and are now asking to be connected.

Although the Ride the Wilds project has not resulted in a huge increase in full-time jobs, Gamache says with confidence that many jobs were saved because of it.

Many small businesses that were facing closure were able to remain open because of the increase in the trail riders in their areas, he says.

No Easy Path

Most western states are home to large tracts of accessible public lands that are crisscrossed by trails and by timber and mining roads.

But east of the Mississippi River, OHV trails must be pieced together through bargaining with private landowners concerned about granting access to strangers who may damage their property. There also is the question of who might be liable for any mishaps.

Essential to the success of these trail programs are public/private partnerships that focus on providing a solution to the liability problem, which landowners face whether they grant access or not.

A 2006 study by Marshall University's Center for Business and Economic Research in Huntington, W.Va., concluded that “professional trail management also reduces illegal use of private property and improves access and infrastructure.”

According to Hatfield-McCoy’s Lusk, landowners who historically prohibited OHV use can be persuaded to participate when a state or county agency—often through an independent recreation authority—assumes responsibility for management, law enforcement and liability insurance.

Gamache points out that negotiations with landowners can be slow.

“We have a few more connections to be made this summer. Several were approved last year but trail construction delays and some landowner negotiations took a little longer than originally anticipated,” he says. “We have actually been working on the connections for a number of years and many of the approval processes were in place before the Ride the Wilds initiative was named. However, the swell of support from local, regional, state and federal levels certainly catapulted our ability to make the connections quickly this past summer.”

Repeated Successes

The Spearhead Trails in Virginia and the Appleton Area Recreational ORV Park in Minnesota provide two more examples of the economic advantages that come with OHV trail development and fostering a welcoming environment for riders.

The Spearhead Trails include the 75-mile Mountain View OHV/ATV Trail System that has contributed to an economic surge in the small town of St. Paul, Va.

Andrea Hicks, assistant marketing director for Virginia’s Southwest Regional Recreation Authority, says downtown St. Paul has attracted more than $500,000 in private investment since the trail system opened in June 2013.

Two ATV rental companies, a trailside assistance business and additional lodging facilities have sprung up in this town of about 1,000 residents.

One local retailer converted apartments above his store into overnight lodging for OHV riders. The retailer also converted a house on this property into a “lovely overnight cottage,” Hicks says.

A 12-room motel is undergoing renovations with the expectation that it will open by spring, she says.

A local gas station doubles its staff on weekends, and a local restaurant reports “a significant increase in sales” when the OHV riders are in town.

As a sign of the influx of the off-highway vehicle culture, a couple of mechanical horse rides for kids have been converted to ATV rides, she says.

“Everybody is getting on board,” Hicks says.

Dave Halsey, a writer for the National Off-Highway Vehicle Conservation Council and founder of the Woodtick Wheelers ATV/OHM Club in Minnesota, says the Appleton park is a small-town success.

The park brings “demand from riders for vehicles, gear, food and lodging,” and local businesses “are responding to it and benefitting from it,” he says.

Park users spent an average of $189 a day per group, according to a study completed by the University of Minnesota, Morris Center for Small Towns.

A Long-Term Approach

Although many communities in the eastern United States are only recently realizing the economic benefits of off-highway vehicle tourism dollars, one state has embraced the sport for decades.

The Cycle Conservation Club of Michigan organized in 1968 when the state’s Department of Natural Resources intended to close state game areas in southern Michigan, says Lewis Shuler, the club’s executive director.

Eventually, the opponents became allies, with the CCC joining the DNR in a partnership to manage and expand the OHV trail systems throughout the state.

By 1975, the club had won a promise from the state for 1,500 miles of trails in the lower portion of the state.

That was only the beginning, however. Gradually, the system grew to encompass 5,400 miles of roads in both the Upper and Lower Peninsulas that are open to licensed and unlicensed vehicles.

Trails are still being added. Since 2004, the system has grown by 25 percent, Shuler says, and more trails are planned.

“In the original 1975 legislation, we were promised an ORV [off-road vehicle] park in southeastern Michigan, but we still don’t have it,” Shuler says.

The DNR and the CCC are pursuing opportunities in that area to assemble tracts of land that could be used for the park, he says.

At the same time, the CCC also is starting to reach out to private landowners with the hope of negotiating leases and adding new trails, Shuler says.

Because of the partnership with the state DNR and the persistence of the CCC, the Michigan trails system has experienced continued growth, and the benefits continue to spill over to communities near the trails.

As Michigan transitions from its heavy reliance on manufacturing, tourism—and especially outdoor recreation—presents an attractive opportunity.

“There are lots of communities here that only survive because of the ORV trails,” Shuler says.

“The Silver Lake State Park (near Mears) is dedicated to ORV use, and it is a gold mine for the state,” Shuler says.

Campgrounds, grocery stores, service stations and other businesses benefit directly from the OHV riders.

“Some of the biggest ATV dealerships in Michigan are located near the riding activity, not near the population centers,” Shuler says. “One of the biggest dealerships in the state is in one of the traditionally poorest counties.”

No Panacea

While trail development and the resulting economic benefits help local economies expand and diversify, the OHV tourism boom isn’t likely to become the type of dominant industry that can sustain a region on its own.

“The trails system isn’t a driver for an entire economy, but it provides revenue and entrepreneurial opportunity,” says Hatfield-McCoy’s Lusk. “It helps to diversify the economy by adding a layer of economic development that didn’t exist before.”

There also are unexpected consequences. In the counties that are home to the Hatfield-McCoy systems, there has been a real estate boom, of sorts.

Property values are rising, Lusk says. But the land is going to “buy-and-hold” speculators, rather than to “buy-and-build” investors.

Shuler says the Michigan trails are subject to many of the same economic fluctuations as other industries, with use and revenue lagging during lean times.

“We are seeing less use and shorter trips, because people just don’t have the money to spend in this economy,” he says.

But the number of trail permits issued by the Michigan DNR has held steady at 200,000 a year for the past four years, and as each new trail opens, the riders arrive and local businesses report increased sales, plans for expansion and new jobs.

By all accounts, the OHV programs have proved beneficial to the riders, the communities and the states.

Numbers Tell The Story

OHV trails attract visitors who contribute significantly to local and state economies. Here are some numbers:

“The total output impact, sales generated from OHV recreation at the [Croom Motorcycle Area in Florida], is estimated at over $21 million. This output resulted in the creation of 318 full and part-time jobs and $9.38 million income for labor," according to a study by the University of Florida.

In Colorado, motorized recreational enthusiasts spent more than $602 million while taking trips using their motorized vehicle for recreational purposes during the 2012-13 season, according to a report from the Colorado Off-Highway Vehicle Coalition.

Motorized recreation in Colorado is directly or indirectly responsible for almost 9,000 jobs and $373 million in labor income.

An analysis by Ohio University concluded that OHV recreation and tourism in southeastern Ohio generated $1.39 million in direct spending and $656,980 in labor income, creating 26 full-time-equivalent jobs in 2008.

The Western Governors’ Association found in 2012 that outdoor recreation accounted for $646 billion in total spending, supporting more than 6 million jobs.